Fossil fuels have always been the most important source of energy for the world. But in view of the energy crisis faced by the world today due to fossil fuel depletion, it is time for us to shift our attention to other renewable sources which could be used as fuel alternatives. This paper examines the suitability of Eucalyptus oil\ud as a source of biodiesel, for use in Compression Ignition Engines. Biodiesel was produced from pure Eucalyptus oil by the process of Transesterification and the fuel properties were studied. In the next phase, a single cylinder direct injection diesel engine was used to test the blends of eucalyptus biodiesel with neat diesel fuel in various ratios (10%, 20% and 30% by volume). The various performance and emission characteristics of the engine for each of the fuel blends were analyzed for all operating conditions of the engine. Results showed that the use of\ud biodiesel blends resulted in a significant reduction in the HC and CO emissions with a performance almost equivalent to diesel fuel at almost all loads. However, an increase in the NOx emissions was noticed while raising the biodiesel content in the fuel blend, which could be reduced by suitable engine optimisation\ud techniques
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